European stocks declined this week as better-than-estimated earnings failed to ease concern a seven-month rally in equities has outpaced the prospects for economic and profit growth.
STMicroelectronics NV led a retreat in technology companies after Royal Bank of Scotland Group PLC recommended selling the shares. Elan Corp sank 22 percent as its multiple sclerosis drug Tysabri was linked to 23 cases of a potentially fatal brain disease. Valeo SA advanced 4.9 percent after posting a quarterly profit. Nestle SA climbed 7.1 percent as UBS AG advised buying shares in the world’s largest food company.
The Dow Jones STOXX 600 Index slipped 0.3 percent to 244.89, following two weeks of gains. The regional gauge has rallied 55 percent since March 9, pushing its valuation to about 50 times companies’ reported earnings, near the most expensive level since 2003, weekly data compiled by Bloomberg show.
“It’s tough for companies to surprise on the upside because investors are anticipating better-than-estimated earnings,” said Markus Steinbeis, head of equity portfolio management at the German unit of Pioneer Investments, which oversees about US$221 billion globally. “Overall the environment for the equity market is good but the only headwind at the moment is high valuations.”
Stocks erased gains on Friday even after a report showed sales of existing US homes climbed last month to the highest level in more than two years.
GDP in the UK dropped unexpectedly in the third quarter as enduring slumps in services, manufacturing and construction kept the economy mired in its longest recession on record.
The UK’s Office for National Statistics said on Friday that GDP dropped for a sixth month, declining 0.4 percent in the third quarter from the second. Economists predicted a 0.2 percent increase in a Bloomberg News survey.
National benchmark indexes fell in 13 of the 18 western European markets.
Germany’s DAX declined 0.1 percent, while France’s CAC 40 retreated 0.5 percent. The UK’s FTSE 100 increased 1 percent.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2